The Albanese government is facing a push to return employment services to the public sector as a union warns mutual obligations are doing “more harm than good”.
An influential parliamentary committee is examining privatised employment services, with the government mulling an overhaul of a $7bn system it says is not working.
As new analysis from the Australian Council of Social Service reveals compliance under the new Workforce Australia system is still disproportionately affecting vulnerable jobseekers, the Community and Public Sector Union has told the inquiry the system will not be fixed by “tinkering” or “tweaking”.
In a submission, the CPSU said the government should immediately suspend mutual obligations and called for the creation of a public sector job agency.
“There’s overwhelming evidence now that the mutual obligation system is punitive, and is doing more harm than good,” the union’s assistant national secretary, Michael Tull, said.
Tull said the evidence suggested the suspension of mutual obligations during the pandemic “made it easier for people to find employment and improve their engagement with the labour market”.
The argument is at odds with two decades of bipartisan consensus that relies on mutual obligations and compliance to get people into jobs.
Currently, jobseekers must attend compulsory appointments with a private provider, submit a set number of job applications and undertake other courses, training or activities as part of a “points” system.
Those who do not meet obligations have their payments suspended until they rectify the issue. Supporters say suspensions act as a “trigger” to ensure jobseekers continue to engage with the system.
But critics argue compliance has become automated, grown increasingly harmful and places too much power in the hands of privatised agencies.
Past requirements that jobseekers made genuine attempts to find work have given way to prescriptive “box ticking”, inhibiting individualised support, they claim.
Acoss, which will appear at the inquiry on Wednesday, will release new analysis showing 65% of jobseekers in the Workforce Australia system received a payment suspension in the March quarter.
For the highly disadvantaged cohort who are connected to a job agency, the figure was 75%. Past data has found homeless people, First Nations people and those with disabilities are overrepresented.
Tull argued the privatised system combined with mutual obligations was what “enables so many providers to get by without delivering decent services for people, because people don’t have any choice”. “So mutual obligations and privatisation go hand in hand.”
In its submission to the parliamentary inquiry, chaired by the Labor MP Julian Hill, the CPSU called for a “modern” Commonwealth Employment Service (CES). The CES operated from the postwar period until it was shut by the Howard government.
“Part of the theory for privatisation was that there would be a large number of community-based providers and competition between those providers would ensure good quality services for job seekers and value for money for taxpayers,” Tull said.
“How the system’s developed, though, is it’s becoming increasingly centralised to a couple of major players dominated by for-profit multinationals.”
A recent shake-up of job agency contracts completed last year by the Coalition significantly reduced the market share of some major for-profit providers, though many still dominate the system.
The prime minister, Anthony Albanese, has signalled the government is looking to reform employment services, saying they aren’t “working to the extent that they should”.
“Clearly, some of the system that’s been established by our predecessors is about ticking the boxes rather than providing that support,” Albanese said this week.
The peak body for the employment services sector, the National Employment Services Association, has warned against a return to public provision, arguing the old system was far more costly and massively underperformed in its final years.
“Contemporary employment services are significantly more sophisticated than the fundamental labour exchange service delivered by the former Commonwealth Employment Service,” it said in a submission.
The CPSU says a new version of the CES would be updated for the modern economy and would sit alongside other specialised employment services provided by the non-profit sector.
The government heeded the parliamentary inquiry’s recent recommendation to scrap the controversial ParentsNext program in the federal budget.
